Mar 7, 2025
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“The most terrifying fact about the universe is not that it is hostile but that it is indifferent.” – Stanley Kubrick
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
US equity futures were higher earlier but have given up those gains (what else is new) as we approach the release of the February Non-Farm Payrolls report. Overnight and this morning, we’ve seen global weakness, although they haven’t seen nearly the level of weakness this week that US equities have. Germany and Japan were notable losers with declines of about 2%, while the STOXX 600 is down less than 1%. Treasury yields are lower as the 10-year sits under 4.25%
For the week, the S&P 500 is on pace for a decline of 3.6%, while the Nasdaq is on pace for a loss of over 4%. For both indices, this week is likely to be the worst week since the week ending 9/6, and for the Nasdaq, it will be the third straight weekly decline of 2%+, which would be the longest such streak since late July/early August of last year.
Certainty has been lacking lately, but efficiency has been abundant on the part of the market in pricing that in. The chart below is from page two of the Morning Lineup and shows the S&P 500’s 50-day moving average (DMA) spread, as measured in standard deviations. The S&P 500 has gone from firmly overbought to ‘extreme’ oversold territory in only eight trading days. These kinds of swift moves have been very uncommon over time.
It’s not just the S&P 500 that has moved deep into oversold territory. The snapshot below from our Trend Analyzer shows that as of yesterday’s close, every major US Index ETF except the Dow (DJIA) was at ‘extreme’ oversold levels (2+ standard deviations below their 50-DMA).
Mar 6, 2025
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“The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” – Michelangelo
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Beggars can’t be choosy, but is a rally that lasts just one session the best we can do these days? As good as days like yesterday feel during waves of selling, when most of those gains get washed away before the next session’s opening bell, it’s grueling. Futures for all the major indices are down over 1% this morning on no specific news other than continued uncertainty related to tariffs, trade, and almost everything else. While administration officials periodically dangle a carrot to the market, the threat of a much broader blanket of tariffs coming within a month looms larger.
Despite the uncertainty, markets will still open for trading at 9:30. Before that we’ll get several economic indicators, including Non-Farm Productivity, Unit Labor Costs, and most importantly jobless claims at 8:30. Last week’s initial claims report came in 21K ahead of expectations, and if there’s another upside surprise in that reading, look for the stagflation chatter to pick up in intensity. Adding to concerns over the employment picture, Challenger, Gray, and Christmas reported this morning that US employers announced 172K layoffs in February, the largest for a single month since July 2020.
It’s been a painful couple of weeks for US equities. As shown in the snapshot below from our Trend Analyzer, both the S&P 500 and Nasdaq 100 remained in oversold territory even after yesterday’s bounce, and they’re both down roughly 2% over the last week. The action in US equities stands in stark contrast to international equities, which are mostly higher over the last week and at varying degrees of overbought levels. European equities, as tracked by the ETF VGK, are up over 15% YTD and headed into today at ‘extreme’ overbought levels (2+ standard deviations above 50-day moving average).
Mar 5, 2025
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“I am convinced that there is nothing they admire so much as strength, and there is nothing for which they have less respect than for weakness” – Winston Churchill
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The term ‘weakness’ has a lot of applicability to the current market environment. There has been little positive to say about how equities have performed since the S&P 500’s record high two weeks ago. Has it only been two weeks?
With the S&P 500 finishing the day down by more than 1.2%, the only positive thing to say about yesterday was that the 200-day moving average (DMA) provided some level of support. After trading down near that level in the morning, the S&P 500 bounced through the afternoon and even briefly peeked into positive territory. The good times didn’t last long. With President Trump being more of a mush on stock prices lately than Fed Chair Powell, there was a barrage of selling into the close ahead of last night’s address to Congress.
This morning, equity futures are putting in a valiant effort with gains, but they’re already well off the overnight highs and barely higher. Where they finish is anyone’s guess. Treasury yields are modestly higher, crude oil is back down to $67 per barrel, gold is marginally higher, and Bitcoin is surprisingly back above $90K.
European markets have bounced back from yesterday’s weakness following news in Germany after yesterday’s close that the country would increase deficit spending, and that has 10-year German Bund yields surging over 20 bps to their highest levels in over a year.
On the economic calendar, ADP Payrolls were just released, and the headline reading came in at 77K versus forecasts for an increase of 148K. With market concerns shifting from inflation to the health of the economy, this report is likely to raise some concerns. It’s important to remember that ADP has often varied widely from Non-Farm Payrolls, but the miss will put added significance on tomorrow’s jobless claims report. Outside of that, the only two other reports are ISM Manufacturing and Factory Orders at 10 AM.
While the 200-DMA provided support for the S&P 500 yesterday, we’d caution about getting too excited. Remember, it was only Friday that the Nasdaq ‘successfully’ tested its 200-DMA, but that support lasted less than one trading session.
The short-term direction of the market is anyone’s guess, but from a longer-term perspective, we’d note that as extreme as the last two weeks may seem in the moment, the market has been there and done that. Since WWII, there have now been 64 pullbacks of 5%+ from an S&P 500 record high. This decline seems especially swift as it took the S&P 500 less than two weeks to reach the 5% milestone, but we would point out that a third of the prior 63 pullbacks reached the 5% level just as fast or even faster. For all 63 prior streaks, it took an average of less than four weeks (25 calendar days) to fall 5% from an all-time high.
The top chart below shows every time the S&P 500 experienced a 5% pullback from an all-time closing high, and the second chart shows the same occurrences over just the last ten years. Some of these pullbacks expanded to become full-fledged extended bear markets where, in some cases, the S&P 500 lost a significant percentage of its value. In most cases, though, the declines were short-lived, and you’d have a hard time even remembering what caused them in the first place.
In his speech last night, President Trump told Congress, “There’ll be a little disturbance, but we’re OK with that.” For everyone invested in the stock market, how little is little?
Mar 4, 2025
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“The only thing we have to fear is fear itself.” – Franklin D. Roosevelt
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Target CEO Brian Cornell appeared on CNBC earlier, and while we didn’t count, throughout an interview lasting just a few minutes, it seemed like the term “certainty” was mentioned dozens of times, as in there is none. The current market sell-off that’s still less than two weeks old has been driven to this point almost entirely by fears and uncertainty as opposed to actual events. Fears and uncertainty over the economy, fears and uncertainty over interest rate policy, fears and uncertainty over US trade policy, fears and uncertainty over tax policy, fears and uncertainty regarding geopolitical stability. We get it. There’s always uncertainty, but this has been a different level. Like a box of chocolates, you never know what you’re going to get, except that lately they’re all flavors nobody likes (think Orange Cream, Maple Nut Butter, Cherry Cordial, etc).
This morning, you could say we’re getting some certainty as tariffs with China, Canada, and Mexico take effect. These moves are all expected to have an inflationary impact (Cornell noted that produce prices will start rising this week), but that’s not being reflected in crude oil prices and Treasury yields. Equity futures were looking eerily quiet earlier this morning. However, as we approach the opening bell, the tone has steadily weakened as international markets have also moved sharply lower. There’s not much to speak of in terms of economic data today, so unless there are any impromptu comments from the President during the day, the next potential catalyst will be tonight’s address to Congress tonight.
Heading into last week’s earnings report from Nvidia (NVDA), most investors assumed the company would report better than expected results. Based on the company’s past reporting patterns and the comments from the major hyper-scalers when they reported earlier in earnings season, it was also almost a foregone conclusion that the company would raise guidance, especially because they only provide short-term guidance a quarter out. Whatever impact, if any, DeepSeek would ultimately have, it wasn’t going to change short-term spending plans for the coming three months. Given that, in last Wednesday’s email of the Morning Lineup, we mentioned that “How the market reacts to that report could give us a good idea of the market tone as we head into Spring.”
NVDA’s performance since then hasn’t been a good omen, as the stock is down over 13% since its report. As shown in the chart below, NVDA’s price chart, which was already trending lower, now looks like it’s breaking down, and yesterday, the stock closed at its lowest level in close to six months (9/18/24).
The chart below shows every day since the launch of ChatGPT at the end of November 2022 and how many days had passed since NVDA last closed lower than that day’s close. Since the launch of ChatGPT, NVDA has never closed at a 52-week or even a six-month low, and yesterday was the first time it closed even at a 166-day closing low.
Since it comprises about 7% of the Nasdaq, NVDA’s plunge yesterday also took the Nasdaq marginally below its 200-DMA, which is a place it hasn’t been in more than a year – 333 trading days to be exact. The breakdown below its 200-DMA was only the 11th time the index ran more than a year without closing below that level. This just-ended streak ranked as the 7th longest streak of closes above the 200-DMA of all time.
Mar 3, 2025
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“We so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.” – Alexander Graham Bell
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Well, at least it’s March. Anyone with a net long position in the stock market was happy to see February end. Although the S&P 500 finished the month down just 1.42%, the Nasdaq was hit with a decline of just under 4%, and nearly all of it came last week as the index declined 3.5%. Remember, it was only seven trading days ago that the S&P 500 closed at a record high!
This morning, equities are looking to build on last Friday’s gains as investors await the release of the February ISM Manufacturing report. In Europe, the STOXX 600 kicked off the week with gains of close to 1%, driven by a 2%+ rally in Germany. Manufacturing PMI readings for the region generally came in better than expected, but the rally in Germany has also been driven by a 10%+ rally in defense contractor Rheinmetall based on expectations that the EU will increase military spending to support Ukraine.
Getting back to last week’s trading, it was mostly positive at the sector level. As shown in the snapshot below, just four out of eleven sectors finished the week in the red. Technology (XLK) was the big loser, falling close to 4%, along with Utilities (XLU), which fell 1.3%. The two other sectors to finish lower were Communication Services (XLC) and Consumer Discretionary (XLY), which each shed around 1%. The losses in these two sectors were driven by mega caps like Tesla (TSLA) and Amazon.com (AMZN) in the Consumer Discretionary sector and Alphabet (GOOGL) and Meta Platforms (META) in the Communication Services sector. Besides these four sectors, most others were up at least 1%, including Financials (XLF) and Real Estate (XLRE), which gained over 2% each.
Relative to their short-term trading ranges, nine out of eleven sectors remain above their 50-day moving averages (DMA), but then there’s Consumer Discretionary and Technology, which both remain at oversold levels.
Feb 28, 2025
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“Everybody deserves a fresh start every once in a while.” – Bugsy Siegel
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s been a rough few days for the equity market since last Wednesday’s record closing high, but at least futures are trading modestly higher. Maybe the market is getting a fresh start! After these last six trading days, if positive futures still make you optimistic, what market have you been watching? On five of those six days, the S&P 500’s intraday high came in the first ten minutes of the trading day, and there has been a reliable pattern of afternoon selling the entire time. Just look at the chart below of the S&P 500 ETF (SPY); since last Wednesday’s record high, there have been six straight days where SPY finished the day below where it opened. Is it too much to ask for just one day when Lucy doesn’t pull the football away from Charlie Brown?
We just got a bunch of economic data hitting the tape, and it was mixed. Personal Income increased more than expected, but Personal Spending was weaker than expected. More importantly, though, PCE data, which the market was most focused on, came in right in line with expectations. The immediate reaction in equity futures has been positive, but we’ll see how that plays out as the market digests the numbers.
While you may be thinking TGIF, that hasn’t been the case in the early days of the second Trump Administration. The chart below shows the S&P 500’s performance on every trading day since President Trump was inaugurated, with Fridays and Mondays highlighted in red. Of the nine trading sessions that have occurred on Friday or Monday during this time, the S&P 500 has only been up once (2/10, +0.67%), and the median performance has been a decline of 0.50%.
